United States securities and exchange commission logo
September 22, 2022
Murray Bailey
Chief Executive Officer and President, and Director
EESTech, Inc.
Suite 417, 241 Adelaide Street
Brisbane, 4000, Australia
Re: EESTech, Inc.
Registration
Statement on Form 10-12G
Filed August 26,
2022
File No. 000-32863
Dear Mr. Bailey:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments.
Registration Statement on Form 10-12G filed August 26, 2022
Description of Business, page 3
1. Please revise your
filing to more clearly identify your current principal business and
operations versus your
intended future operations. Your disclosure should clearly state the
current status of your
principal products and services, the steps and costs necessary to
introduce each product
to market and your anticipated timeline. Please also describe, to
the extent material to
an understanding of the registrant, the duration of your existing
trademark(s) and
expected durations of your patents pending once they are approved, the
need for any government
approval of principal products or services, the effect of existing
or probable
governmental regulations on the business, and the costs and effects of
compliance with
environmental laws. Refer to Item 101(h) of Regulation S-K.
2. Please provide the
basis for your statement here and elsewhere that your mineral
processing capabilities
dramatically reduce cost, increase productivity, reduce energy
Murray Bailey
FirstName LastNameMurray Bailey
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requirements, eliminate polluting leachates, transform hazardous waste
liabilities into
products of value with zero-waste outcomes, and significantly reduce
the carbon footprint
of mineral resource processing. In addition, please revise your
disclosure to explain how
your "disruptive technologies," including IRF, deliver a "paradigm
shift" in how mineral
recourses are processed and how you intend to provide a "circular
economy" to the mining
industry.
3. We note you disclose that you have established a Heads of Agreement
(HOA) with
industry leading equipment suppliers for the collaborative development
and project
deployment of their equipment. Please revise to describe the material
terms of this
agreement and file a copy of it as an exhibit to your registration
statement, or advise us
why you do not believe you are required to do so. Refer to Item
601(10) of Regulation S-
K.
Company and Subsidiary History, page 3
4. Please revise your heading and/or subheadings to distinguish the
entities that are your
subsidiaries from those for which you have performed work.
Samancor Chrome Holdings Proprietary Limited, page 5
5. We note you disclose on page 6 that on February 21, 2019, Samancor
Chrome Holdings
Proprietary Limited (Samancor) awarded you a 10-year contract with a
5-year extension
option to undertake the recycling of FeCr slag waste at their
Emalahleni facility, and that
you were contracted to deliver a "zero waste" solution using your
advanced process
methodologies to reclaim up to 99% of residual FeCr units from
Samancor s slag dumps.
We understand that under the terms of the contract, Samancor is
obligated to purchase all
FeCr metal reclaimed by you at a pre-determined discount to the spot
market price for
FeCr, and based on the volume of recoverable FeCr, you believe the
potential contract
value over ten years is approximately US$800 million, plus an upside
share in FeCr
market price increases.
Please expand your disclosures to provide greater detail regarding the
current status of this
project and address the following points:
Explain how the "potential contract value" of $800 million was
formulated, including
details of the revenues and costs to be incurred under the
contract in determining such
value.
Provide details about any material assumptions underlying these
estimates, including
clarifications regarding the extent to which your assumptions are
based on historical
experience.
Clarify whether you have limited your assumptions to the
initial ten year period or
have also included cash flows for the extension period.
Describe the pattern of cash flows that you are anticipating
over the term of the
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contract as reflected in your estimate of the potential contract
value.
Describe the nature of the costs that you anticipate will be
incurred in fulfilling your
performance obligations under the contract.
Describe any process methodologies and technologies that you
have yet to obtain or
establish in order to meet the contract specifications.
Clarify your expectations about the timeframe that will precede
performance under
the contract, as may encompass the 18-month "project
establishment period"
mentioned on pages 16 and 17, and the extent of any additional
time beyond that
period that may be necessary for the completion of other
activities before meaningful
cash flows are generated.
Provide an estimated date for completion of the project
establishment period and
detail the nature and estimate of costs to be incurred during
this period.
Identify and discuss any uncertainties, as may pertain to
technological and logistical
feasibility, government regulations, or other factors that may
delay the completion of
this period or your performance under the contract.
Please also file a copy of the agreement with Samancor, or advise as
to why you do not
believe you are required to do so. Refer to Item 601(b)(10) of
Regulation S-K.
Sasol South Africa Limited, page 5
6. We note your disclosure here that pre-contract trials with Sasol are
continuing and your
disclosure at page 16 that Sasol has given EESTech two work orders.
Please revise to
better detail the nature and status of the pre-contract trials,
including any payment
arrangements, and file any related agreements as exhibits to your
registration statement or
tell us why you believe you are not required to do so. In addition,
disclose any ongoing
discussions with Sasol and whether work continues under the two work
orders referenced.
To the extent you are dependent on the work from Sasol, please include
an attendant risk
factor.
EESTech Binary Compounds, page 7
7. We note your disclosure that the cumulative benefits of EESTech s
waste stabilization
process have been validated by an analysis of ThermaSand and
independent analysis
reports that EESTech s waste stabilization process transforms the
environmental liabilities
of FeCr slag waste into an inert, commercially preferred high-grade
sand. Please revise to
disclose the source of this analysis.
Risk Factors, page 17
8. The management services consulting agreements filed as Exhibits 10.1
and 10.2, the
description of your directors' experience on page 22, and the
Brisbane, Australia location
of your principal executive office indicates that your officers and
directors are located
outside of the United States. Please include a risk factor addressing
the risk to U.S.
stockholders of effective service of process, enforcing judgments and
bringing original
Murray Bailey
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EESTech, Inc.
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actions in foreign courts to enforce liabilities based on the U.S.
federal securities laws.
Our plan requires technological expertise to develop and to oversee the
operations our
technologies and process capabilities, page 18
9. We note your disclosure that you have an internal research and
engineering team and an
advisory board conversant with the Company s technologies and
process capabilities.
Please revise to identify the members of the internal research and
engineering team
and advisory board, and to better describe the functions of each.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Year Ended December 31, 2021 compared to Year Ended December 31, 2020, page 22
10. We note you disclose that four directors received 1,500,000 shares for
past services
rendered. Please confirm these services were performed during the
fiscal year ended
December 31, 2021 as we note you have recorded the consultancy fees
associated with
these services during this period.
11. We note your disclosure that your consultancy fees were $792,941 for
the year to
December 31, 2020, and $1,088,514 for the year to December 31, 2021,
respectively.
Please clarify the nature of the services rendered, other than for
payments made to your
directors.
Liquidity and Capital Resources, page 23
12. Please expand your discussion to address any material cash
requirements you may have
associated with fulfilling your contracts with Sasol and Samancor,
including the
anticipated source of funds needed to satisfy those cash requirements.
Refer to Item
303(b)(1) of Regulation S-K.
Certain Relationships and Related Transactions, page 28
13. Please revise to provide the disclosure required by Instruction 1 to
Item 404 of Regulation
S-K for the two years preceding your last fiscal year. In addition, we
note you state that,
since January 1, 2021, there have been no transactions, and there
currently are no
proposed transactions in which the Company was or is a participant,
and in which any
related person has or will have a direct or indirect material
interest, which would require
reporting in this section. However, your disclosure at page F-14
indicates that balances
owing to related parties were $406,809 as at December 31, 2021. Please
revise or advise.
Choice of Forum, page 32
14. We note that your forum selection provision identifies the Court of
Chancery of the State
of Delaware as the exclusive forum for certain litigation, including
any derivative
action. Please disclose whether this provision applies to actions
arising under the
Securities Act or Exchange Act and, if so, include related risk factor
disclosure. In
this regard, we note that Section 27 of the Exchange Act creates
exclusive federal
Murray Bailey
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September 22, 2022
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jurisdiction over all suits brought to enforce any duty or liability
created by the Exchange
Act or the rules and regulations thereunder, and Section 22 of the
Securities Act creates
concurrent jurisdiction for federal and state courts over all suits
brought to enforce any
duty or liability created by the Securities Act or the rules and
regulations thereunder. If the
provision applies to Securities Act claims, please also revise your
disclosure to state that
investors cannot waive compliance with the federal securities laws and
the rules and
regulations thereunder. If this provision does not apply to actions
arising under the
Securities Act or Exchange Act, please ensure that the exclusive forum
provision in your
bylaws states this clearly, or tell us how you will inform investors
in future filings that the
provision does not apply to any actions arising under the Securities
Act or Exchange Act.
Financial Statements
Balance Sheets, page F-3
15. Please tell us and disclose the origin of the Change in proportionate
interest reserve
balance reported within stockholders' equity on your balance sheets
and statements of
changes in stockholders' equity. To the extent it originated from
transactions resulting
from changes in the ownership interest of a subsidiary, please tell us
how your balance
sheet presentation of stockholders' equity (deficit) complies with the
guidance in FASB
ASC 810-10-45-16 which requires amounts attributable to noncontrolling
interests in
subsidiaries to be reported separately from the parent's equity.
Note 2 - Summary of Significant Accounting Policies
(n) Foreign Currency Translation, page F-11
16. We note the functional currency of your foreign operations is the
Australian dollar. Please
expand your disclosure to indicate your reporting currency is the US
dollar.
General
17. We note you indicate on the registration cover page and elsewhere in
filing that you
qualify as an emerging growth company. Please tell us the basis for
your determination
that you qualify as an emerging growth company. In that regard, we
note you filed a
registration statement on Form S-8 that was declared effective June
11, 2002 and note
Question (2) of the Jumpstart Our Business Startups Act Frequently
Asked Questions.
18. We note the notes to your financial statements state that COVID-19
caused disruption
of supply chains across a range of industries. If you have experienced
supply chain
disruptions, whether due to COVID-19 or other factors, please revise
your risk factor
FirstName LastNameMurray Bailey
disclosure and discuss known trends or uncertainties resulting from any
mitigation efforts
Comapany NameEESTech,
undertaken. Inc. whether any mitigation efforts introduce new
material risks,
Also, explain
including
September those
22, 2022 related
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FirstName LastName
Murray Bailey
FirstName LastNameMurray Bailey
EESTech, Inc.
Comapany 22,
September NameEESTech,
2022 Inc.
September
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We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Lily Dang, Staff Accountant, at (202) 551-3867 or
Jenifer Gallagher,
Staff Accountant, at (202) 551-3706 if you have questions regarding comments on
the financial
statements and related matters. Please contact Liz Packebusch, Staff Attorney,
at (202) 551-
8749 or Karina Dorin, Staff Attorney, at (202) 551-3763 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Energy &
Transportation
cc: David Mittelman